Record surge in UK businesses facing severe financial distress as costs climb

The number of companies in the United Kingdom in critical financial troubles jumped through the record by 50.2 percent quarterly to 46,853 in the last three months of 2024, according to new data from the insolvency specialist Bigbis Treenor

Construction and consumer companies carry the burden of this distress, which increases fears of widespread insults next year.

The latest alerts of the “red flag” of the “red flag”, which connects 6,830 construction company, highlights signs of critical stress. Consumer sectors were also severely exposed, as they increased by 76 percent in the severe financial difficulty of entertainment operators and an increase of 48 percent among retailers. The collapse of high -level names such as Homebase, Carpetright and Body Shop have confirmed pressure on retail companies and paid thousands of job losses.

“Many UK’s troubled companies find it almost impossible to move in the challenges they face at the beginning of 2025”. He referred to increases in taxes and wages that were presented in the last budget, including high national insurance contributions to employers and an increase in the minimum national wages, as the potential transformation points of companies that struggle with consumer confidence and huge borrowing costs.

The research studied factors such as the provisions of the province’s court against companies and final petitions. “There was an unprecedented level in almost every sector in the number of companies that are at risk of insolvency in the next 12 months,” Julie Palmer, a partner in Bigbis Treenor. She added that the companies facing the consumer, in particular, feel the pressure of the increasing operational costs, which, after the disappointing Christmas season, can pay a lot “above the edge.”

Meanwhile, the 2024 official insolvency service numbers showed a 5 % slight decrease in the total number of corporate collapse, to 23,872. However, the high interest rates and the broader economic pressures have paid 14 percent personal settlement throughout the year, from 103,434 to 117,94. This indicates a “real and dangerous issue” with consumer debts.